East Kalimantan fails to solve regencies dispute over income shares

The East Kalimantan provincial administration failed on Friday to solve the dispute between the East Kutai and Kutai Kertanegara regencies over shares in oil and gas revenues as one of the regents failed to appear at the meeting meant to solve the dispute, according to local dailies Kaltim Post and Radar Kaltim.

The papers said regent of Kutai Kertanegara Syaukani did not come to the meeting for unknown reasons.

Regent of East Kutai Faroek Awang was clearly disappointed at Syaukani's absence, the papers said.

"How can we negotiate if Kutai Kertanegara is not coming," said Faroek, who came to the meeting along with the regency's councilors.

Oil and gas companies operating in both regencies, including Unocal Indonesia, Pertamina, TotalFinaElf Indonesia and Exspan Nusantara sent representatives to the meeting, where they were expected to detail on their operating areas to help solve the disputes between both regencies.

The central government initially stated that East Kutai would receive Rp 606.1 billion (US$1=Rp 10,905) in oil and gas revenue shares this year, while Kutai Kertenagara would obtain Rp 573.3 billion.

But, in confidential letters, the central government later cut East Kutai's oil and gas revenue shares to Rp 138.4 billion, while increasing Kutai Kertanegara's revenue shares to Rp 1.04 trillion.

Under the decentralization policy implemented in the beginning of the year, regencies will receive 15 percent in the government's oil revenue and 30 percent in the government's revenue shares.

Faroek suspected the central government had changed the revenue share split following a strong lobby by Syaukani, who he described as an excellent lobbyist.

He threatened to camp in Jakarta to push the central government to stick to its initial decision on the revenue share split. (*)